From The New Yorker we learn that Eric Cantor finally acknowledged that he and Paul Ryan blew up the Grand Bargain in 2011. Both he and Ryan convinced Speaker John Boehner to walk away from a budget deal. The agreement included a combination of tax hikes and spending cuts while the GOP's proposal focused on gutting Obamacare, paring back social programs, and more tax breaks for the rich.
The president, in turn, told the Republicans that they would make their case and let the voters decide in 2012. The GOP agreed. President Obama proposed sequestration as a way of avoiding the fiscal cliff in 2011. Guess what? The voters decided that they liked President Obama's plan better.
This week the GOP decided to go off the cliff anyways. Nice.
In a few words, we're now facing mandatory cuts because the GOP isn't getting their way. They are throwing a political tantrum. And for what? The president is a big spender, according to the GOP. The evidence suggests otherwise.
Let's take a look.
Big Spender?
In my last article to the Bakersfield Californian I was taken to task for my interpretation of new spending by people who don't understand charts, written nuance, and, apparently, basic math. I got the usual Fox-inspired comments that, once again, made it clear that there's an entire group of people who don't care to do their homework, and who believe whatever our nation's shiny spoon, Fox News, tells them to believe.
What my critics can't seem to wrap their head(s) around is what new federal spending means. So I explained in another post that new federal spending refers to what President Obama puts on the books. It's what the president proposes and gets to spend.
What President Obama had on his desk when he walked into the Oval Office, like the built-in trillion dollar deficits, is another matter. I then wrote that blaming President Obama for the built in budget deficits is akin to congratulating the man who marries the woman who is already pregnant from her previous boyfriend.
Understanding this distinction is important for two reasons.
First, while our total national debt continues to climb because of the credit card spending binge by the previous administration "new" spending on the nation's credit card has, comparatively speaking, stalled. The smarter readers of this blog will find this point repetitive (you know who you are). But keep in mind some people need to have this point repeated.
Second, if we understand the distinction between what was left on the president's desk and "new" spending it should help everyone understand that all the hoopla over the mandatory spending cuts (sequestration) that was supposedly made necessary by President Obama's "out of control" spending was always a manufactured story. It was always a smoke and mirrors sideshow designed to bring us where we are today.
And the GOP has worked diligently to make it happen.
But first, let's check out the numbers.
U.S. Deficits Shrinking at Fastest Pace Since the Great Depression
Because new spending under President Obama has dropped to its lowest level since President Eisenhower, over the past 3 years - and for the first time since 1937 - our nation's budget deficits declined as a percentage of GDP. What this means is that the size of our annual budget deficit today is lower than when President Obama entered office.
Need the actual numbers? OK.
From fiscal 2009 through fiscal 2012 the deficit shrank 3.1% (from 10.1% to 7.0% of GDP). The only other times the deficit has fallen faster was during the military demobilization years following WWII and during the Great Depression (1937). Check out this chart from Investor's Business Daily ...
What all this means is that the GOP - with the help of their shrill media pieces - have manufactured the deficit-budget crisis by refusing to work with the president. This is part of a larger obstructionist strategy that was concocted on inauguration night 2009, as Robert Draper outlined in his book, Do Not Ask What Good We Do.
If we understand that President Obama is simply the foster parent of a larger debt problem he took on, and that the GOP was always going to say No to President Obama, it makes much easier to embrace the following: The leadership of GOP was always inclinded to walk away from the deal John Boehner had with President Obama in August 2011. And they did (article with audio here).
Simply put, they needed to create a budget crisis that they could dump on President Obama's lap. It's the only way they could get the American public to forget it was their guy and their policies that put us in this economic mess in the first place.
For those inclined to counter that the Democrats controlled the Senate in 2009 and the GOP-led House passed budget legislation while the Senate has not, I have one thing to say: Learn more about poison pill legislation, continuing resolutions, filibuster politics, and what it meant to have people like Joe Lieberman and Ben Nelson on the Democratic side.
But one thing is certain. Because they couldn't get the president to sign off on the same policies that brought us the 2008 market collapse and trillion dollar deficits, Reps. Cantor and Ryan decided to force Speaker Boehner to walk away from his deal in 2011. This is what led President Obama to propose sequestration.
The GOP has always wanted this mess.
- Mark
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